Georgia Official: CU Safety, Soundness ‘Keep Me Awake at Night’

When asked what credit union regulatory or supervisory issues keep him awake at night, Steve Pleger, senior deputy commissioner at the Georgia Department of Banking and Finance, talked about fundamentals.

“I would like to say that the supervisory issues that keep me awake at night are something new and exotic, but they're not,” Pleger said. “The issues that keep me awake at night are timeless fundamentals in the operation of safe and sound credit unions, such as governance, controls, and concentrations.”

“Safety and soundness begin with an informed and engaged board of directors providing oversight to and establishing the tone for credit union management,” Pleger explained.

Control functions, such as audit and loan review, serve as the board of directors' eyes and ears, ensuring that the board has timely, unfiltered, and actionable information to support oversight and strategic decision making, he suggested.

“Concentrations, which we describe as putting too many eggs in one basket, are too often the killer of otherwise healthy credit unions when not accompanied by strong risk management processes and appropriately ample net worth positions,” Pleger said.

He added, “The need for constant vigilance and improvement in these three fundamentals are what keep me awake at night, and probably always will.”